Great companies achieve great things. Take Elecosoft, a specialist developer of BuildTech, asset maintenance and visualisation software. Solutions that deliver substantial benefits for construction firms, architects, contractors and landlords alike - across the entire property lifecycle, particularly in terms of quality, project management, cost, efficiency and time.
This morning the company said it had made an encouraging start to 2019, with Q1 revenues up 20% (22% constant currency). This is higher than our FY19 estimates of +18.8% YoY (LFL 5%), and more so given we'd expected a H2 bias - reflecting tougher H1'18 comparisons (7% LFL vs 3% H2), the time required for sales initiatives to take root, and Q2 product launches. In fact, in April there was an important new version (#15) of the group's flagship PowerProject released, which may have caused a few customers to defer purchases.
Therefore, considering these mini headwinds we are actually more than pleased with progress - and estimate that in constant currencies Q1'19 turnover might have actually been over 5% LFL, vs our base case of 3%. In turn, pushing Q1 PBT above LY, and in line with FY expectations which allied to strong cash generation (+£1.2m), meant March net debt fell to £0.9m from £2.1m in December.
However given the ongoing macro uncertainties, we have decided to conservatively hold our forecasts and 115p/share valuation, but suspect there may be scope for upgrades in due course.
